Exporting of goods is a sizable component to the economy of most industrialized nations. For example, companies based in the United States (U.S.) account for as much as about $1 trillion of exported goods each year. However, even in view of the significant volume of goods and related financial transactions associated with exporting of goods internationally, international trade still has a heavy reliance of the costly creation and hand-delivery of transaction information (i.e., documents and/or data) for clearance through customs and financial settlement. Recently heightened homeland security policies and requirements on international trade only serve to further burden conventional approaches to facilitating international trade. In quantifying the degree of this burden, a survey by the United Nations estimated administrative costs for international trade to be as high as about 7% of world trade.
Administrative tasks for international trade and their associated financial costs are felt not only by financial institutions, but also by companies large and small. Relatively large companies (i.e., about 500 or more employees) account for as much as about 71% of U.S. exports value and relatively small companies (i.e., less than about 100 employees) represent as much as about 89% of U.S. exporting entities. Regardless of size or global location, conventional approaches for facilitating international trade adversely impact nearly all exporters.
Export letters of credit are a key component to facilitating international trade. An export letter of credit ensures that an exporter (i.e., a seller) of goods will receive payment from a foreign customer ordering such goods (i.e., a buyer). Facilitating international trade via an export letter of credit includes the exporter requiring that the customer's bank issue a letter of credit. The export letter of credit serves to substitute the credit standing of the customer's bank (i.e., the issuing bank) for that of the customer, thereby minimizing the risk of non-payment due to factors arising from various considerations (e.g., political and/or financial considerations).
An export letter of credit is one example of a payment contract. Other payment contracts used in international trade include documentary collections and open account transaction payment. In the case of the export letter of credit, the buyer's financial institution's credit is substituted for the buyer's credit and the buyer must deliver multiple compliant transaction information to banks within a limited time period in order to be paid under the letter of credit. In documentary collection payment contracts, the buyer cannot receive the title to the purchased goods until making payment for the goods at the local bank office. In an open account payment contract, the buyer may receive the goods without payment but is expected to pay the seller within a fixed period of time. In every case, multiple compliant transaction information must be delivered to various parties involved in each transaction to satisfy the terms of the applicable payment contract.
A transaction for facilitating payment in international trade is referred to herein as an international trade receivables transaction. From a buyer's standpoint, such a financial transaction is a payment transaction. Conversely, from a seller's standpoint, such a transaction is a receivables transaction.
Conventional approaches for facilitating international trade receivables transactions are known to have one or more shortcomings. One example of such shortcomings is that complying with transaction information required for payment contracts of international trade receivables transactions is generally tedious and complex work for the treasury, credit and/or logistics departments of most companies, which frequently leads to errors in such transaction information, and delays in delivering compliant transaction information. As a result payment to is often delayed, reduced or not received and companies generally have low productivity and/or increased headcount in their international business groups to address these issues. Another example of such shortcomings is that one or more of the required parties in an international trade receivables transaction (e.g., the buyer, the seller, the issuing bank, the confirming bank, etc) are often not appropriately aware of important requirements within a particular payment contract, again resulting in delays in payment, underpayment or non-payment. Yet another example of such shortcomings is that much of the required transaction information (e.g., documents) associated with a payment contract for an international trade receivables transaction are prepared by third party venders (e.g., freight forwarders, carriers, insurance providers, inspection companies and the like), which often leads to transaction information that is non-compliant with respect to the payment contract and which require significant time and expense to aggregate, proof and correct, resulting in further delay. One last example of such shortcomings is that many companies have distributed functional departments (e.g., manufacturing, billing, credit and logistics departments) that may be separated by several thousands of miles, which due to inherent logistical issues (e.g., language barriers, couriering timelines, business hours, etc) often contributes to relatively slow and costly internal processing of required transaction information associated with payment contracts for an international trade receivables transaction.
Therefore, facilitating management of international trade receivables transactions in a manner that overcomes one or more of the shortcomings associated with conventional approaches for facilitating management of international trade receivables transactions would be advantageous, useful and novel.